Following last week's announcement that LVG - the parent company of driving instructor business RED Driving School - had entered administration, private equity firm Kelso Place Asset Management has issued a statement that it has acquired the business.
RED has grown rapidly since its creation in 1992 to become the UK's leading driving instructor training business and fastest growing driver training school. It has revenues of approximately £40 million and 400 employees.
However, according to Kelso Place, a short term funding shortfall arising from a change in its banking arrangements caused the company to be placed into administration on 16th February 2010.
Philip Weston, a partner at Kelso Place, explained: "RED is a very strong, stable and profitable business, which experienced a short term funding difficulty when its financing facilities were changed suddenly. We have made a significant cash investment in RED in order to solve its funding problem and to ensure that it is able to continue operating successfully for the long term."
Meanwhile, David Downing, CEO of RED business said: "Throughout this short period of administration, the company has continued to trade as normal. As a result of Kelso Place's investment, RED is now in a very strong financial position, which will enable us to maintain our high levels of customer service and cement our market leading position."
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